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Unsecured Convertible Notes
 3 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Unsecured Convertible Notes

Note 9 — Unsecured Convertible Notes

 

The Company’s unsecured convertible notes payable at June 30, 2021 and March 31, 2021 were as follows (in thousands): 

 

   June 30,
2021		   March 31,
2021		 
Unsecured Convertible Notes - Related Party        
7.5% Unsecured Convertible Note - Due May 31, 2022  $4,473   $4,397 
7.5% Unsecured Convertible Notes - Due May 31, 2022   1,122    1,104 
Less: Discount   
-
    
-
 
Net   5,595    5,501 
           
Unsecured Convertible Promissory Note  $2,000   $2,000 
Accrued Interest   230    186 
Less: Discount   (158)   (223)
Fair Value of Embedded Derivatives   1    13 
Net   2,073    1,976 
Unsecured Convertible Notes, Net   7,668    7,477 
Less: Unsecured Convertible Notes, Current   (2,073)   (1,976)
Unsecured Convertible Notes, Net, Long-term  $5,595   $5,501 

 

Total principal maturities of the Company’s long-term borrowings, including the senior secured convertible debentures, unsecured convertible notes, and notes payable are $2.5 million for the year ending March 31, 2022 (remaining nine months), $4.7 million for the year ending March 31, 2023, and $15.1 million for the year ending March 31, 2024. For the year ended March 31, 2025 and thereafter, the total principal maturities of $0.4 million consist of obligations to repay the PPP and SBA loans.

 

Unsecured Convertible Notes – Related Party 

 

As of June 30, 2021 and March 31, 2021, the Company had outstanding 8.5% unsecured convertible notes payable (the “Trinad Notes”) issued to Trinad Capital Master Fund Ltd. (“Trinad Capital”), a fund controlled by Mr. Ellin, the Company’s Chief Executive Officer, Chairman, director and principal stockholder, as follows below. The Trinad Notes are convertible into shares of the Company’s common stock at a fixed conversion price of $3.00 per share.

 

The first Trinad Note was issued on February 21, 2017, to convert aggregate principal and interest of $3.6 million under the first senior promissory note and second senior promissory note with Trinad Capital previously issued on December 31, 2014 and April 8, 2015, respectively. The first Trinad Note was due on March 31, 2018 and was extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). At June 30, 2021, the balance due of $4.5 million, which included $0.9 million of accrued interest, was outstanding under the first Trinad Note. At March 31, 2021, the balance due of $4.4 million, which included $1.0 million of accrued interest, was outstanding under the first Trinad Note.

 

Between October 27, 2017 and December 18, 2017, the Company issued six unsecured convertible notes payable to Trinad Capital for aggregate total principal amount of $1.1 million. The notes were due on various dates through December 31, 2018 and were extended to May 31, 2019 and further extended to May 31, 2022 (as discussed below). As of June 30, 2021, $0.2 million of accrued interest was included in the principal balance.

 

The Company may not redeem the any of the Trinad Notes prior to May 31, 2022 without Trinad Capital’s consent.

 

Unsecured Convertible Promissory Note

 

On February 5, 2020, React Presents issued a two-year $2.0 million Convertible Promissory Note (the “Note”), bearing annual interest at 8%. The purpose of the Note was to fund the acquisition of React Presents. All unpaid and outstanding principal and any unpaid and accrued interest are due on February 5, 2022. The Note is convertible by the holder at any time prior to maturity in part or in whole with the unpaid interest and principal convertible at a conversion price equal to $4.50 per share of the Company’s common stock, subject to certain protective adjustments. The Note may be prepaid in whole or in part in cash without penalty at any time prior to maturity. Any such prepayment will be applied to accrued interest first and then the principal.

 

At June 30, 2021, the Company performed a fair value analysis using a binomial lattice calculation on the derivative instruments using the following assumptions: Coupon Rate: 8.0%, Term: 0.6 years, Volatility: 85.2%, Market Rate: 5.1% and Probability of Default: 7.1%. The Company determined that as of the assessment date, the fair value is $0.1 million. The change in fair value of less than $0.1 million is recorded in other income (expense) on the Company’s consolidated statements of operations for the three months ended June 30, 2021.